If an employer provides a wage statement showing irregular earnings, what is the correct basis for the disability rate?

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Prepare for the California Self‑Insurance Plans (SIP) Exam with our interactive quiz. Benefit from multiple-choice questions, detailed explanations, and essential tips to enhance your knowledge and succeed in your exam!

Multiple Choice

If an employer provides a wage statement showing irregular earnings, what is the correct basis for the disability rate?

Explanation:
When earnings are irregular, the disability rate is based on two-thirds of the worker’s actual average weekly earnings over a look-back period (such as the prior 13 weeks). You don’t use the week of injury’s pay; you compute the average weekly wage from the earnings before the injury and then take two-thirds of that average. This approach ensures the benefit reflects typical earnings rather than a single week’s pay, while still respecting any statutory minimum or maximum TD caps.

When earnings are irregular, the disability rate is based on two-thirds of the worker’s actual average weekly earnings over a look-back period (such as the prior 13 weeks). You don’t use the week of injury’s pay; you compute the average weekly wage from the earnings before the injury and then take two-thirds of that average. This approach ensures the benefit reflects typical earnings rather than a single week’s pay, while still respecting any statutory minimum or maximum TD caps.

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